April 2, 2020 - The RightLine Report
Notes From The Editor
Our confidence as traders isn't based on our forecasting skills, it's found in our ability to respond appropriately to any and all market conditions. This includes the types of extreme situations we've encountered since the coronavirus prompted governments around the globe to react with drastic measures. In every circumstance we focus on using adaptive trading methods that produce profits in whatever environment the market creates.
Our RightLine team developed their skills during years of varying real-time market conditions. We didn't just learn from the popular Bull market periods, but also from the extremely tough Bear markets that took many investors out of the game.
One thing we've learned ... no matter who you are, you have to go through some pain to get to the profits. Even Warren Buffet has dropped his plate a few times. That's why we emphasize Risk Control. At some point every trader feels the effect of the market's steep learning curve. We teach traders how to minimize and prevent any financial suffering.
We don't point condemning fingers or throw someone under the bus just because they make a few mistakes. That's primarily because we're students of the market. Fortunately we've been students long enough to know how lucky we are to associate with traders who understand this, and promote education over ego.
We're certainly grateful for each of these role models and mentors. We're also just as grateful for our readers, who give us much more than just their hard earned subscription dollars. The constructive comments, suggestions and even criticisms have helped make RightLine one of the most respected trading sites on the web.
Trade well,
Thomas Sutton, Editor
Stocks Covered Today...Stock Splits...
Quick List
Stock 04/02 04/02 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
PSF 21.12 0.67 21.48 19.91 1.57/0.79 4.60
MLHR 20.17 -0.49 21.52 19.10 2.42/1.21 5.14
EPR 20.05 -0.02 21.59 19.32 2.27/1.14 10.68
MODN 20.49 0.10 20.84 19.32 1.52/0.76 3.90
The "Quick List" provides a brief summary of each stock write-up and should be taken in the context of the related write-up presented in the "Stocks Covered in This Issue" section of this Report.
Be sure to read "How To Use The RightLine Quick List" and always use the RightLine Risk Control Calculator before entering any position. For access to the Risk Calculator, go to http://www.rightline.net and login to the Member's area.
For more on controlling risk go to the RightLine Risk Control System
For a glossary of terms unique to The RightLine Report go to: Glossary
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Stocks Covered Today...Stock Splits...
Market Summary
Stocks closed higher on Thursday following a rally in the energy sector as crude oil prices jumped upward from a near two-decade low. The surge in oil prices came after comments from President Donald Trump that he believes Russia and Saudi Arabia may end their price war soon by announcing production cuts. However the ongoing uncertainty regarding the intensity and duration of the COVID19 impact kept bulls in check. Economic headlines included an upsurge in US weekly initial jobless claims for a second week, factory orders were flat and the trade balance was smaller than predicted. In equties, American Airlines (AAL $10) announced it has drawn down most of its credit line, while Walgreens Boots Alliance (WBA $41) beat quarterly earnings expectations and was the latest company to postpone providing guidance, The USD/dollar and gold finished higher, treasury yields were lower.
Apr 1, 2020 Apr 2, 2020
-------------------- --------------------
Dow 20,944 -973.65 21,413 +469.93
Nasdaq 7,360.58 -339.52 7,487.31 +126.73
S&P 500 2,471 -114.09 2,527 +56.40
NYSE Volume 6.03B 6.56B
NYSE Advancers 209 1759
NYSE Decliners 2801 1199
Nasdaq Volume 3.72B 3.64B
Nasdaq Advancers 406 1857
Nasdaq Decliners 2901 1370
New Highs/Lows
03/26 03/27 03/30 03/31 04/01 04/02
--------------------------------------------
NYSE New Highs 4 3 5 5 3 2
NYSE New Lows 21 43 59 29 116 117
Nasdaq New Highs 5 12 15 18 14 4
Nasdaq New Lows 31 46 41 46 83 138
Stocks Covered Today...Stock Splits...
TRADER'S TIP: "Reverse Stock Splits"
In a final attempt to keep from getting dropped by a major stock exchange, many companies will resort to a "Reverse Stock Split" - the stock market's version of a Hail Mary football pass! Announcement of a reverse split often serves as a warning to sell or short the stock. Up to 75% of all stocks end up trading lower after the board of directors declares a reverse split.
The Technical Analyst
For help with this chart, be sure to read "Understanding The Importance Of Support And Resistance"
and "Boost Your Profits With Moving Averages".
S&P 500 - 2526.90 April 2, 2020
52-Week High: 3393.52
52-Week Low: 2191.86
Daily Trend: DOWN
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 3347.08
Resistance 2: 2901.93
Resistance 1: 2721.70
Pivot: 2456.78
Support 1: 2276.55
Support 2: 2011.63
Support 3: 1566.48
NASDAQ Composite - 7487.31 April 2, 2020
52-Week High: 9838.37
52-Week Low: 6631.42
Daily Trend: DOWN
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 9671.33
Resistance 2: 8492.93
Resistance 1: 7997.66
Pivot: 7314.54
Support 1: 6819.26
Support 2: 6136.14
Support 3: 4957.74
Dow Industrials - 21413.44 April 2, 2020
52-Week High: 29568.57
52-Week Low: 18213.65
Daily Trend: DOWN
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 29577.98
Resistance 2: 25196.57
Resistance 1: 23416.67
Pivot: 20815.16
Support 1: 19035.26
Support 2: 16433.75
Support 3: 12052.34
Stocks Covered Today...Stock Splits...
Market Calendar
ECONOMIC REPORTS AND EVENTS (all times are Eastern): Monday, March 30, 2020: 30-Mar 10 am Pending home sales index Tuesday, March 31, 2020: 31-Mar 9 am Case-Shiller home price index 31-Mar 9:45 am Chicago PMI 31-Mar 10 am Consumer confidence index Wednesday, April 01, 2020: 01-Apr 8:15 am ADP employment report 01-Apr 9:45 am Markit manufacturing PMI 01-Apr 10 am ISM manufacturing index 01-Apr 10 am Construction spending 01-Apr Varies Motor vehicle sales 01-Apr Thursday, April 02, 2020: 02-Apr 8:30 am Weekly jobless claims 02-Apr 8:30 am Trade deficit 02-Apr 10 am Factory orders Friday, April 3, 2020: 03-Apr 8:30 am Nonfarm payrolls 03-Apr 8:30 am Unemployment rate 03-Apr 8:30 am Average hourly earnings 03-Apr 9:45 am Markit services PMI 03-Apr 10 am ISM nonmanufacturing index For a chart of typical Up or Down market reactions to specific major US economic reports go to: Economic Indicator Effects
Stocks Covered Today...Stock Splits...
TRADER'S TIP: "The Trader Says . . ."
"Being right three or four times out of 10 should yield a person a fortune if they have the sense to cut losses quickly."
- Bernard Baruch
Stocks Covered in This Issue
FINANCIAL SERVICES SECTOR
Cohen & Steers Select Preferred and Income Fund, Inc. (PSF: Financial Services/Asset Management) - SQUEEZE PLAY. Thursday's narrow price range has created a potentially profitable setup in PSF, as sellers and buyers find themselves in a near tie for control of price direction. The next short-term trend could go either way, so prepare for a move out of the draw within the next day or so. Set a BUY entry at 21.48 and a SELL short entry at 19.91. Let PSF's price action determine your long or short entry. Once the order is filled, place a 1.57 trailing stop, and tighten it to 0.79 upon getting a 4.60 gain. PSF closed Thursday at 21.12. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 253.645M. Not Optionable.
INDUSTRIALS SECTOR
Herman Miller, Inc. (MLHR: Industrials/Business Equipment & Supplies) - SQUEEZE PLAY. MLHR is stuck in a Bull/Bear deadlock. Fortunately for traders this impasse should be resolved soon, with one side or the other taking control. We want to be positioned for a potential quick move up or down, so get ready to catch this train with a BUY entry at 21.52 and a SELL short entry at 19.10. Once your trade is filled, enter a 2.42 trailing stop. Tighten it to 1.21 after a 5.14 gain. MLHR closed on Thursday at 20.17. Earnings Report Date: Jun 23, 2020. Beta: 1.61. Market-Cap: 1.191B. Optionable.
REAL ESTATE SECTOR
EPR Properties (EPR: Real Estate/REIT-Retail) - SQUEEZE PLAY. Thursday's trading session left EPR in a very narrow price range after buyers and sellers fought to a near stalemate. Both sides are looking for some traction, and a breakout either way could provide a nice gain in the short term. To get aboard, set your BUY trigger at 21.59 and your SELL short trigger at 19.32. One of the orders will be triggered by upcoming price action. When your market order is filled, cancel the remaining trigger and enter a 2.27 trailing stop. Once you have a 10.68 profit, reduce the stop to 1.14. Earnings Report Date: Apr 26, 2020. Beta: 0.73. Market-Cap: 1.564B. Optionable.
TECHNOLOGY SECTOR
Model N, Inc. (MODN: Technology/Software-Application) - SQUEEZE PLAY. Traders are feeling the pressure as MODN's intra-day price range on Thursday shrunk to the narrowest spread in over a week. The tension between buyers and sellers should provide enough pent-up engergy for a breakout move in the days ahead, so get ready to trade with the new trend. To achieve that, place a BUY entry at 20.84 and a SELL short entry at 19.32. MODN's price movement will decide which entry is filled. As soon as you're in the trade, enter a 1.52 trailing stop. Tighten it to 0.76 after you get a 3.90 gain. MODN closed Thursday at 20.49. Earnings Report Date: May 04, 2020. Beta: 0.52. Market-Cap: 683.018M. Optionable.
IMPORTANT: Before entering any positions, always use the Risk Control System to determine the level of acceptable risk and the maximum number of shares to buy. Use Gap Adjusted Entries to reset the Entry Price for stocks that gap beyond recommended entry levels.
Stocks Covered Today...Stock Splits...
Stock Splits
Below are the stocks that have announced splits and have recently executed or will execute soon. There is generally a return to normal price behavior in the weeks following a split announcement in what we call a "Dormancy Phase." As the stock nears its split execution date (Effective Date) it often moves into the "Pre-Split Run" stage where quick and sometimes dramatic gains can occur.
Announce Eff. Split
Company Name (Symbol) Date Date Ratio Options
---------------- ------- -------- ------- ------ -------
Currently there are no upcoming stock splits on the major US exchanges.
Split details are also available online at the RightLine Online Stock Split Calendar. For a detailed look at the different stages of a Stock Split, Click Here.
A simple yet powerful tool, the Risk Control Calculator helps you manage risk by recommending a maximum number of shares to purchase. Available to all RightLine subscribers. For access, go to http://www.rightline.net and login to the Member's area.
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